Gold extended losses on Thursday to fall as much as $200 from Tuesday's record high, as investors cashed in scorching gains in the metal after the CME Group hiked trading margins for the precious metal for a second time this month.
Investment appetite for gold has cooled ahead of a widely awaited central bankers' meeting at Jackson Hole, Wyoming, as speculation grows over whether or not the Federal Reserve will signal a further round of US monetary easing.
More quantitative easing — or money printing — for the Fed could significantly lift gold, but it could have further to correct if no additional action is signalled.
Spot gold was down 2.2 per cent at $1,711.99 an ounce at 7:01am EDT, having earlier touched a low of $1,702.44.
Investors have cashed in on gold's latest rally after the yellow metal surged nearly 20 per cent in early August to record highs at $1,911.46 an ounce.
'In a sense the decline is just subtracting the frothy increase (from the market),' said Mitsubishi analyst Matthew Turner. 'That increase has been going on since around $1,600 an ounce, so it is hard to see where the bottom lies.'
But the metal's overall uptrend, which has seen it climb more than 20 per cent this year, is still intact, analysts said.
'To be convinced you'd seen the top of the market you would have to see more signs of the issues that had lifted gold being resolved, such as the euro zone crisis, and US growth coming back,' said Turner.
Source : New Age
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